Will Vermont Leaders Wage War Over Labor?

When Lindsay Kurrle, Vermont's brand-new labor commissioner, took a seat in front of the House Commerce and Economic Development Committee last week, she and the panel's 11 members were all smiles.

"I look forward to working with you all," said the cheery Montpelier native, four days into what she described as a "dream" job.

Such a friendly opening is common in the getting-to-know-you stage of a new legislative session. Not evident in the crowded Statehouse committee room were the flash points looming between the Democratic legislature and Kurrle's boss, newly installed Republican Gov. Phil Scott.

Kurrle told the committee that the Department of Labor would be working more closely with the Agency of Commerce & Community Development. But she offered no indication that Scott was just days away from proposing a significant reorganization that would merge the two entities.

The change would transform the now-stand-alone DOL into a Department of Labor and Workforce Development, which would be housed within a reorganized ACCD, to be renamed the Agency of Economic Opportunity.

No jobs would be cut, Scott said. The goal is not to save money, he added, but to allow each department to focus on its core mission. He argued that there has been a disconnect between workers searching for jobs and employers searching for workers.

"This will better align putting workers with employers," Scott said.

How this will go over with lawmakers remains to be seen. They were taken aback by the rushed nature of the executive order. When Commerce Committee chair Bill Botzow (D-Pownal) asked Kurrle last week if she had any proposed legislation in the works, she told him, "Nothing big at this point."

The Commerce and Labor merger raises concerns with some lawmakers, Senate President Pro Tempore Tim Ashe (D/P-Chittenden) said Tuesday.

Ashe said Labor's and Commerce's duties can be at odds. "You have promotional economic development activities, and then you might also be enforcing the labor laws for the same companies," he said.

Legislators, meanwhile, have their own plans that are bound to irk Scott. One indication of that was the presence of a legislator seated immediately to Kurrle's right last week in the House committee room. Rep. Paul Poirier (I-Barre), a longtime labor-loving legislator, had been reassigned to the Commerce Committee from the House Health Care Committee.

Less than a week into the session, Poirier was crafting a raft of labor bills: He wants to raise the minimum wage to $15 an hour by 2020, provide a more gradual reduction in benefits to low-income Vermonters who get jobs or raises, and tighten state rules regulating employers' use of independent contractors.

Fueled by a 2016 presidential election in which Sen. Bernie Sanders (I-Vt.) demonstrated strong support for labor issues, the legislature's Democrats appear primed to tackle one or more of them. Doing so would surely put them at odds with the new governor.

"There is a shift in that committee toward big labor," said Rep. Heidi Scheuermann (R-Stowe), a property-management business owner whom Johnson took off Commerce and shipped against her will to the House General, Housing and Military Affairs Committee.

Meanwhile, Johnson also increased the size of the House General Committee, which oversees labor issues, from eight to 11 members. That elevates the panel from what had been something of a second-class-citizen status.

The boost will allow the committee to take on more issues, according to its chair, Rep. Helen Head (D-South Burlington). She said some of that new firepower will be devoted to debating the minimum wage, paid family leave and ensuring that employers don't misclassify employees as independent contractors.

"There is a sincere interest in labor work," Head said.

A similar labor-friendly shift occurred in the Senate. There, the Economic Development, Housing and General Affairs Committee still has a Republican chair: Rutland Sen. Kevin Mullin.

But the three-member panel that doles out committee assignments — now featuring the left-leaning Ashe and Progressive/Democratic Lt. Gov. David Zuckerman — gave the rest of Mullin's committee a more labor-friendly makeover.

The Vermont Chamber of Commerce warned its members in a recent newsletter that the change is a bad sign for economic development. "The committee's traditional focus on solving business issues may be challenging," the chamber noted.

Sen. Michael Sirotkin (D-Chittenden), the committee's new vice chair, is sponsoring legislation to raise the minimum wage and provide Vermonters with 12 weeks of paid family leave, to cover a child's birth or a personal or family illness.

The latter bill also has traction in the House — from lawmakers not known as big labor backers. Reps. Sam Young (D-Glover) and Matt Trieber (D-Rockingham) are lead sponsors of the House version.

"I think it's a good bill for the working class," said Young, a relatively moderate Democrat whom Johnson appointed vice chair of the House Ways and Means Committee. "It's pro-family."

The legislation calls for the paid family leave program to be funded by a payroll tax of just less than 1 percent, split evenly between employer and employee. It would create something akin to an insurance plan that all employees, including business owners, could tap into.

Those are some of the pro-labor bills surfacing in the early days of the session. There could be more, including a bill to establish a government-administered private pension program and another to require that employers have cause to fire workers.

Every one of them would go against Scott's pro-business mind-set. A former co-owner of an excavation company, he maintains strong ties to the business community. He won the governor's seat last fall by promising economic growth — and has made clear that raising the minimum wage and mandating paid family leave would not help.

In an interview last week, Scott reaffirmed his argument that businesses can't afford more state mandates. "There are a lot of pressures on businesses," he said. "Some small businesses are at the breaking point."

Scott argued that raising the minimum wage would be counterproductive and that pay would organically rise for all employees when the economy grows.

Vermont settled the minimum-wage debate years ago, Scott said, when lawmakers established gradual annual increases. In 2014, lawmakers voted to juice up that annual increase. In 2017, the minimum wage rose 40 cents to $10 an hour. In 2018, it will increase to $10.50.

When it comes to paid family leave, Scott has said he's open to discussing options, but he balked at imposing new costs on employers.

In the early weeks of the session, it's unclear how vigorously the legislature or the governor will defend their ground on these issues.

"It's premature," Ashe said last week of setting specific priorities for the year.

Generally, Ashe said, his goal is to address a gap between those who are flourishing and those who are struggling economically. He suggested that the solution could include raising the minimum wage while softening the cutoff of benefits for those whose wages increase.

House Democrats and labor leaders plan to hold a press conference Wednesday afternoon to push for a higher minimum wage.

With Ashe, Johnson and Scott all new in their roles this year, none of them is ready to throw down the gauntlet — yet.

Scott said that he gave Kurrle no marching orders to halt or champion any particular piece of legislation. He insisted only that she adhere to the goals he asked of all his hires: make Vermont more affordable, grow the economy and protect the most vulnerable.

Kurrle, whose family owns the Montpelier-based fuel delivery and convenience store companies Kurrle Fuels and Kurrle Transport, acknowledged that she comes to the job with a business owner's perspective. But, she insisted, "The administration is willing to listen to anything that will make Vermont ... more affordable."

Johnson emphasized the need for job training, noting that it's an area Scott has also identified as a priority. "We all need plumbers," she said.

As Ashe and Johnson delicately stepped around how vigorously their chambers might pursue labor issues, it seemed clear that more than politeness was at work. They are also weighing their own members' splintered views on labor issues.

Young, for example, while keen on the paid family leave bill, is cool to the idea of raising the minimum wage. In his Northeast Kingdom district, some employers would buckle under the prospect of paying $15 an hour, he said.

Meanwhile, all three state leaders are facing pressures from interest groups.

Vermont Chamber of Commerce president Betsy Bishop stands in Scott's corner. Asked what she thinks of the legislative push for labor, Bishop grew defiant. She didn't want to talk about "labor" issues, she said.

"We need 11,000 more workers to grow the economy," she said, hauling out a flier that shows the gap between the number of workers that employers need and the number available.

Bishop mentioned last week that she'd like to see more cooperation between the Department of Labor and the Agency of Commerce, which both operate job-training programs. That's exactly what she would get under the plan Scott announced.

She is also urging Scott to increase funding for Vermont job-training programs and for marketing the state as a good place to work. Scott is slated to release his budget January 24.

Bishop, who supported Scott's campaign, clearly has the administration's ear. The governor hired the chamber's former lobbyist, Kendal Smith, as his legislative liaison. He also hired Smith's predecessor at the chamber, Jessica Gingras, to work on commerce and labor policy.

Democratic legislators also have formidable forces pushing them on labor issues.

Lindsay Des Lauriers, director of the Main Street Alliance of Vermont, said paid family leave is her organization's priority this year. She argues that by creating a program that offers Vermont workers 12 weeks of paid leave, the state will lure more young families. That, she said, fits right into Scott's playbook — except that it would create a state program with a new tax on business.

Conor Casey, executive director of the Vermont Democratic Party, said the party would be pushing harder for its platform this year.

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